Insurance policies and requirements can be confusing. You may receive conflicting advice from different parties and it’s difficult to know how to make the right choice. Here are some tips to help you avoid common mistakes homeowners often make when purchasing a home insurance policy.
Understand the Difference Between Replacement Cost and Market Value
In the event you ever need to file a claim, it’s important to understand the extent of your coverage. Replacement cost describes the amount of money that it would cost to replace your possessions in the event of a loss. Market value only covers the amount your possessions are currently valued. For example, the difference between the replacement cost and current market value of your five-year-old refrigerator could be substantial.
Talk to a Professional
An independent insurance agent can offer unbiased professional advice about your insurance options. An independent insurance agency has the advantage of working with a variety of insurance companies. Thus, an agent can help you find the policy that best suits your needs and budget without worrying about which company provides the coverage.
Don’t Go for the Cheapest Coverage
Your insurance policy is designed to protect you from substantial loss when an unexpected event occurs. While the cheapest coverage may seem enticing, it should at least offer standard protection for your home and attached buildings, possessions inside the home, and liability coverage.
Understand Your Coverage Limits and How to Fill the Gaps
Sadly, many homeowners don’t learn about the limits of their homeowner’s policy until they attempt to file a claim. Floods and earthquakes are two common disasters that many homeowners mistakenly believe they’re covered for. When you understand the limits of your policy, you have the opportunity to purchase additional coverage to fill these gaps and keep your new home fully protected.
Don’t Skip the Home Inspection
Your home inspection is the one opportunity you have to learn about potential damage or wear that could alert you to repairs that need to be taken care of to avoid major expenses in the future. Your home inspection may also help you learn about repairs that could make you eligible for discounts on your home insurance.